SunGard Omni

Client Service Representative
for Associated Pension Consultants in CA

Pension Administrator
for Abacus Benefit Consultants, Inc. in RI

Defined Benefit Consultant
for The Ryding Company in CA

Pension Consultant
for The Standard in FL

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"Troubleshooting Participant Loans 2012" Web Seminar
Nationwide on September 13, 2012 presented by SunGard Relius

 

[Guidance Overview]

Revised Guidance on Plan Brokerage Windows: A Glass Half-Empty or Half-Full?
"[Certain] brokerage window disclosure obligations for plan fiduciaries remain in the revised guidance. Part of what is left is ... challenging—on the quarterly fee disclosure statements that are generally due to begin [by November 14: the requirement to] disclose and describe some of the fees from the above list actually charged against the account identified by the amount and specific type of fee. Plan fiduciaries, and even participants, often lack access to this information and most service providers are not yet equipped to provide it." (Warner Norcross & Judd LLP)

Retirement Plan Professionals: Attend the ASPPA Annual Conference   [Advert.]

Get ready for what lies ahead for the retirement plan industry in 2012 by attending The 46th ASPPA Annual Conference: Attend more than 70 interactive sessions on hot topics shaping the industry & network with over 1,500 retirement plan professionals.

Six Publicly Traded Companies With Potential Pension Land Mines
"With Social Security facing increasing pressure and personal savings at relatively low levels, any threat to pensions for older workers and retirees could have dire consequences. Yet surprisingly, investors have largely ignored pension-plan problems despite the impact they could have on earnings and long-term prospects.... [A] sign of stress has to do with changes to return assumptions. R.R. Donnelley & Sons raised its estimated rate of return from 8.3% to 8.4% in 2011, even though the actual performance of its investment portfolio was poor. Many such companies appear to be counting on reversions to the mean in returns to bail them out after the Lost Decade left them short of expectations." (AOL Daily Finance)

Negative Rates and Pension Pain
"One of the overlooked victims of the fall and fall of interest rates are corporate pension plans which are facing a ballooning liability even as returns stay tepid. That's because market rates play a key role in valuing pension plan liabilities, and the lower they go the tougher things get for underfunded plans. This may, over time, become a real issue for equity markets, as investors realize that purchases of shares bring not just a right to benefit from future streams of earnings but also the responsibility to meet potentially huge future streams of retiree payouts." (Reuters)

Texas Firm Sees 401(k) Loan Gold on Capitol Hill
"Tod Ruble is trying to sell retirement plan insur.ance that employers say they do not want and their employees may not need.... Since late 2010, he has started up a company, Custodia Financial, and spent more than $1 mil.lion pushing for legislation that would allow companies to automatically enroll employees who borrow from their 401(k) plans in insur.ance that could cost hundreds of dollars a year.... Employers and 401(k) providers say the bill is simply a solution in search of a problem and would just be an added expense for employees." (Reuters)

Shielding Retirement Accounts From Inflation
"Should you hold TIPS in your retirement account? That depends on your age and temperament. For rough guidance, long-term savers should consider the approaches taken by portfolio managers of three of the biggest providers of target-date funds ... [who] all agree that TIPS should play a role in portfolios of retirees and those who are approaching retirement. For younger people, inflation securities may not be the best choice." (TheStreet.com)

Women Face Retirement Challenges, GAO Reports
"While U.S. women are now more likely to be covered by employer-offered retirement plans than men, they continue to end up with less retirement income and face a greater risk of living in poverty than elderly men, according to a new report from the Government Accountability Office (GAO). Why? According to the GAO, it's mainly because women tend to have lower lifetime earnings than men, take more time away of the workforce to care for family members, and outlive their spouses. And, oh by the way, the recession and its bite on pension plans in general isn't helping, either." (About.com)

Three 401(k) Strategies More Important than Asset Allocation
"[In a recent Wharton School study,] researchers conclude asset allocation has a much smaller impact on the success in attaining retirement goals than popular opinion—and many marketing programs of large financial service firms—would have us believe. Indeed, they identified three factors that can influence retirement outcomes more favorably—and with far greater control and predictability—for employees.... 1) controlling spending (i.e., investing early); 2) delaying retirement; and 3) taking out a reverse mortgage." (Fiduciary News)

Defined Contribution Plans: Is Emphasis on Investment Return Causing Employers to Miss the Forest for the Trees? (PDF)
"For decades, the defined contribution industry has focused on the performance of individual funds at the expense of other plan metrics.... [This] analysis suggests that putting fund performance front and center in terms of the plan sponsor's priorities is an error with far-reaching implications. That is not to say that fund performance does not matter, but [that] it is a much less powerful variable compared with asset allocation and, most of all, higher deferral rates." (Putnam Institute)

Just How Progressive Are Elderly Entitlements?
"The Social Security payout formula is progressive. But less educated workers can expect to receive more than a decade's worth of fewer benefits. Ditto for Medicare." (John Goodman's Health Policy Blog)

Plan Sponsors Prove Loyal to Defined Contribution Plan Vendors
"[A recent survey] found that vendor loyalty actually jumped significantly last year among plan sponsors. According to the firm's proprietary algorithm—which measures attributes like personnel, participant services and administrative help—the share of 'loyal' clients rose 6 percentage points to 58 percent versus a 4 percentage point drop in 'at-risk' clients to 16 percent." (Institutional Investor)

MAP-21: Giant Gift for Pension Plan Sponsors
"It is estimated that the 2012 effective interest rate (EIR) for valuation purposes will be 125 to 150 basis points higher than without MAP-21, which will result in a much lower minimum required contribution for the 2012 plan year. In 2013, it is estimated that the EIR will be 100-plus basis points higher than pre-MAP-21. In future years, the effect of MAP-21 on interest rates will decline and then disappear." (CFO)

Older Workers Could Help Social Security and Economic Reform
"Formal models of labor force participation fail to take into account that as the relative supply of younger workers declines, employers will increasingly turn to older workers to meet their demand for labor to provide goods and services. Increased labor force participation among older workers can add to the solvency of Social Security and the broader federal budget." (Urban Institute)

[Opinion]

How the GASB's New Pension Standards Could Make Things Worse
"Currently, public pension funds make their own assumptions about their future investment returns without GASB interference. If public pensions increase the riskiness of their investments, they assume a higher rate of return. Simultaneously, pension funds use that high rate to 'discount' their long-term liabilities, which artificially reduces today's sticker price for the future costs of retiree benefits. This practice has no basis in finance or economics and encourages public pensions to make risky investments and then underestimate the amount they owe. It is the principal reason economists think they are hiding trillions of dollars in liabilities. GASB's new standards do little to change this." (The Huffington Post)

[Opinion]

Bachus Editorial Shows SRO Debate Not Over
"In unilaterally blaming the SEC for failing to uncover Madoff and supporting his position with arguments for increased adviser examinations that no one is arguing against, [House Financial Services Committee Chairman] Bachus [is] skewing both relevant facts and context.... In placing blame for Madoff squarely at the SEC's feet, the article ignores that for the better part of the 20 years the Ponzi was in operation, Madoff was regulated by FINRA as a broker-dealer. FINRA deserves to share a hefty load of blame of its own for missing Madoff." (fi360 Blog)

Multigenerational Employee Engagement Imperative
"[B]enefits played a stronger role in influencing employment decisions for Gen X and Y than for Boomers. [Recent] MetLife research noted that 54% of Gen Y said that if it were up to them, they would like to work for another employer a year from now versus 21% of older Boomers. But one critical commonality ... is a greater willingness across all age groups to pay for voluntary benefits." (Employee Benefit News)

Seattle's New Paid Leave Law Applies to Out-of-Town Employers
"All employers who employ at least five full-time employees (in any city or state) and have at least one employee who performs work within the City of Seattle must soon comply with Seattle's Sick/Safe Leave law. The new law goes into effect on September 1, 2012. All employees, regardless of whether they are temporary, part-time or full-time have the right to paid sick/safe leave under this law if they work in Seattle on an 'occasional basis,' or more than 240 hours within a calendar year. The location of the employer's business is not relevant." (Jackson Lewis LLP)

Plan Sponsors Should Confirm Credentials and Bonding for Internal Staff, Plan Fiduciaries and Vendors Who Deal With Benefits
"Adequate attention to these concerns not only is a required component of ERISA's fiduciary compliance, it also may provide invaluable protection if a dishonesty or other fiduciary breach results in a loss or other exposure.... Monitoring these compliance obligations is important not only for the 401(k) and other retirement plans typically associated with these requirements, but also for self-insured medical and other ERISA-covered employee benefit plans." (Solutions Law Press)

Jonathan Rose Named Chair of ABA Joint Committee on Employee Benefits
(Alston & Bird)

Dr. Therese M. Vaughan To Resign As NAIC CEO
(American Council of Life Insurers)

ExpertPlan Announces Partnership With Fiduciary Benchmarks
(ExpertPlan)